Bus Vannin says it is inevitable that bus drivers will strike tomorrow after late talks failed.
The DoI said talks between Bus Vannin and Unite the Union carried on into last night.
However despite tabling what it said was its fifth offer, the union and its members rejected it.
It further claims that the union put a new proposal on the table but that it rejected a plea to delay strike action while it could be considered.
A spokesperson for Bus Vannin said: “We are disappointed to report that despite ongoing negotiations Unite the Union’s strike action on Saturday now seems inevitable.
“Bus Vannin sincerely apologises for the uncertainty and inconvenience this situation is causing its passengers.”
It says efforts are now focussed on finalising its contingency plans and it will make an announcement about its plans later today.
Bus Vannin is also appealing to anyone with a PSV licence to contact publictransport@gov.im